Plan Selection in the Non-Group Market in the First Year of the Health Insurance Marketplace.

Abstract

BACKGROUND The Affordable Care Act (ACA)-created Marketplaces reduced barriers to entry in the non-group health insurance market. Although tax credits were available to individuals who enrolled in qualified health plans (QHPs) beginning in 2014, many individuals chose not to switch plans. We examined characteristics associated with switching from a non-ACA compliant plan to a QHP in 2014 and, conditional on switching, the characteristics associated with selection of a specific plan level.METHODS Using claims data from a large commercial insurer, we examined characteristics associated with switching to a QHP in 2014. For those who did switch, we used a multinomial logit model to estimate odds of selecting different metal levels-representing varying degrees of coverage-for a group of the highest and lowest risk individuals.RESULTS We found individuals most likely to benefit from the premium and benefit requirements on QHPs were more likely to switch to QHPs. Individuals at high-risk for high health care expenditures who had advance premium tax credits (APTCs) had lower odds of choosing a less generous plan compared to individuals without APTCs (odds of bronze plan over silver: 0.40, CI: 0.30 - 0.55), while individuals at low-risk of being high cost with APTCs were more likely to select a plan with a lower premium (odds bronze plan over silver: 1.35, CI: 1.09 - 1.66).LIMITATIONS This study was conducted with data from 1 health plan, limiting its national generalizability; however, this study is a good representation of activity within the state.CONCLUSIONS APTCs are important for ensuring that less healthy individuals are able to afford adequate levels of coverage.